Infographic - Retirement income by the numbers

Index Methodology and Assumptions

The TIAA-CREF Retirement Income Index data is as of 12/31/2014 and it is based on 501,639 actively contributing participants from 303 TIAA-CREF record-kept plans. Please note: an individual’s income replacement ratio will vary from the study’s estimated rate based on a number of unique individual factors. Study results are not intended to project an individual’s actual ratio.

Using the participant’s current salary, age, contribution rates (employer/employee), asset allocation, and an assumed retirement age of 67, TIAA-CREF leverages the advice engine from Ibbotson Associates, Inc., an independent expert retained by TIAA-CREF, to calculate the projected retirement income stream (including estimated Social Security benefits) in current dollars as a percentage of current salaries using Monte Carlo analysis (500 total simulations).The results indicate the participant’s 70% probability of achieving the retirement goal. A lower probability of success is associated with better (and less likely) estimated income; a higher probability is associated with lower estimated income. Please note the median income replacement ratio based on the analysis above is approximately 88%.

Important Information

The Ibbotson tool’s advice is based on statistical projections of the likelihood that an individual will achieve their retirement goals. The projections rely on financial and economic assumptions of historical rates of return of various asset classes that may not reoccur in the future, volatility measures and other facts, as well as information the individual provides.

IMPORTANT: Projections, and other information generated through the Retirement Income Index and the Ibbotson tool regarding the likelihood of various investment outcomes, are hypothetical, do not reject actual investment results, and are not a guarantee of future results. Results may vary with each use and over time.

Consider investment objectives, risks, charges and expenses carefully before investing. Go to tiaa-cref.org for product and fund prospectuses that contain this and other information. Read carefully before investing. TIAA-CREF funds are subject to market and other risk factors.

TIAA-CREF cannot and does not provide legal advice and recommends that plan sponsors consult their own legal advisors for such advice.

Investment, insurance and annuity products are not FDIC insured, are not bank guaranteed, are not deposits, are not insured by any federal government agency, are not a condition to any banking service or activity, and may lose value.

‡Deposit and lending products and services are provided by TIAA Bank®. TIAA Bank is a division of TIAA, FSB, an Equal Housing Lender and Member FDIC. TIAA, FSB NMLS ID: 399805.

The TIAA group of companies does not provide legal or tax advice. Please consult your legal or tax advisor.

TIAA-CREF Individual & Institutional Services, LLC, Teachers Personal Investors Services, Inc., and Nuveen Securities, LLC, Members FINRA and SIPC , distribute securities products. Annuity contracts and certificates are issued by Teachers Insurance and Annuity Association of America (TIAA) and College Retirement Equities Fund (CREF), New York, NY. Each of the foregoing is solely responsible for its own financial condition and contractual obligations.

Teachers Insurance and Annuity Association of America is domiciled in New York, NY, with its principal place of business in New York, NY. Its California Certificate of Authority number is 3092.

TIAA-CREF Life Insurance Company is domiciled in New York, NY, with its principal place of business in New York, NY. Its California Certificate of Authority number is 6992.